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Absolute Capital Management, the hedge fund manager forced into an overhaul of its business when former chief investment officer Florian Homm unexpectedly left two years ago, is looking to delist from London's junior stock market as it said its diminished size no longer justified the costs and regulatory obligations.

The board of the £1.6m (€1.8m) firm said in an exchange filing today that after "unprecedented market conditions" last year, "there is no longer any advantage...in maintaining a quotation on the Alternative Investment Market...[given] the company's much reduced size and revenues."

A shareholder meeting next month will vote on the plan put forward by the Swiss-headquartered and London-listed group. One-third of shareholders have already agreed to back it. If at least three-quarters concur, ACM expects to delist by June.

ACM is today mailing out details of a tender offer to buy back all the shares at 2.5p, a 15% premium to their price at GMT 07.00 this morning.

ACM restructured its business when it discovered, on Homm's departure, that many assets in several of its funds were in illiquid, small cap stocks it could not easily sell, the company said.

In previous statements, it said it isolated some assets in four funds from forced sales, and locked investors into the funds for 12 months. When the locks lapsed in November investors filed to retrieve between 65% and 85% of their assets, depending on the fund, and ACM shut down some of its portfolios

It put the liquid assets that were in a number of its funds into a subsidiary called Xanthus Asset Management, which had €55.9m at the start of this year, but €45.7m ($59.1m) three months later. Xanthus portfolios are still receiving "significant redemption requests," ACM said.

The company is trying to sell Xanthus, but expects to fetch €1m at most. A spokesman for ACM said, if it was successful in doing this, and after selling down the illiquid assets it is left with, ACM will not be left with significant assets to manage.

ACM's board said its management fee income has fallen to about €77,000, as assets at the firm declined. It also said its salaries and overheads cost about €225,000 per month. In addition, ACM's funds sit below the level at which ACM could retain 20% of new profits, and there is little prospect of that changing "in the immediate future", or of them raising new assets, the board said in its filing.

ACM's chief executive Glenn Kennedy has said he will resign before July, but will still advise ACM on pending litigation, and help wind some funds down, among other tasks. ACM's shares have risen by 41% this year to 2.13p, but have fallen by 99% since being admitted to AIM in 2006.